Tag Archives: gas

Georgia and Gazprom agree deal

MARCH 7 2016, TBILISI (The Conway Bulletin) — Russia’s state-owned gas company Gazprom reached an agreement with the government of Georgia to supply gas via Armenia, renewing a deal that has bound the two countries together.

The deal had been in jeopardy after negotiations over additional gas supplies to Georgia from Russia were frozen. But both the Kremlin and Tbilisi see the Armenia gas supply arrangement as a useful dialogue forum and forced it through.

After last-minute negotiations, Kakha Kaladze, Georgia’s minister of energy, confirmed a deal.

“We have reached an agreement with Gazprom, now we just have to sign it,” he told media.

The deal, Mr Kaladze said was similar to the earlier one, with Georgia receiving 10% of the total gas Gazprom sent to Armenia. Georgia, which has been transforming itself into a transit hub for the South Caucasus, had wanted cash instead of gas for the arrangement but Russia refused to budge.

The renewed deal between Georgia and Gazprom will also be a relief to Armenia, which is reliant on supplies from Russia. It has struck deals with Iran but Russia remains its most important partner.

Until the first quarter of 2016, Armenia will continue paying s discounted rate of $165/thousand cubic metres, which Gazprom cut by 12.% last September.

Armenia and Gazprom will have to negotiate a new price for gas for the rest of the year.

Earlier, on March 4, Georgia signed a deal with Azerbaijan to receive an extra 500,000 cubic metres of gas. It had been in negotiations with Azerbaijan, Iran and Russia for months to seal the deal.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Sasol considers project cut in Uzbekistan

MARCH 9 2016 (The Conway Bulletin) – Due to sustained low oil prices, South Africa’s Sasol is considering dropping its gas-to-liquids project in Uzbekistan. In Uzbekistan, Sasol operates jointly with Malaysia’s Petronas and state-owned Uzbekneftegaz. The project cost stands at around $5.6b. Sasol said it will make a final decision on the project in the first half of the year.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Uzbekistan plans to invest $249m in its giant gas processing plant

MARCH 4 2016 (The Conway Bulletin) – The Uzbek government wants to invest around $294m to increase production and efficiencies in its gas sector, mainly to boost the Ustyurt chemical plant.

State-owned Uzbekneftegaz co- owns the Ustyurt chemical plant with South Korea’s Lotte Chemicals. The $4.1b project was opened in October and is considered key to Uzbekistan’s future economic plans.

The Uzbek government will directly invest around $236m in the Sharkiy Berdakh gas fields near the Aral Sea to complete the new booster compressor station it is building with Ukrainian firm Sumy. The state-run Fund for Reconstruction and Development will provide an additional $58m through a loan.

Uzbekistan is in the top 15 gas producing countries in the world and sees it as the bedrock of its future economic plans. It’s a gamble, though. Uzbekistan and its partners have committed to large energy projects, with fixed up-front costs, as energy prices continue to bounce along record lows.

If it all goes to plan, the project will be completed in November 2016 and output at the gas fields will be increased by 15% to around 2b cubic metres annually. Improved infrastructure will allow Sharkiy Berdakh to supply the Ustyurt plant, located around 100km away in the remote Karakalpakstan region of western Uzbekistan.

The Ustyurt chemical complex has a processing capacity of 4.5b cubic metres per year. It has been designed to turn Uzbekistan into a gas processing hub for Central Asia and also Russia.

Uzbekistan is also looking to invest in its largest chemical complex, Navoiazot. The government issued a $393m loan last week to extend its nitrogen and ammonia facilities.

The Uzbek government has put 49% of Navoiazot, in central Uzbekistan, up for sale to foreign investors in a recent drive to privatise state assets to raise funds to ward off a worsening economic slowdown.

ENDS

(News report from Issue No. 271, published on March 11 2016)

Kazakh court fines Karachaganak

MARCH 2 2016 (The Conway Bulletin) – A Kazakh court fined the consortium operating the Karachaganak gas and condensate field in the north of the country 526b tenge ($1.5m) for environmental damage. The court said the KPO consortium emitted around 43.8 tonnes of pollutants into the atmosphere between April and July 2015. KPO consortium shareholders include BG Group, ENI, Chevron, Lukoil and state-owned Kazmunaigas.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Iran sells gas pipes to Turkmenistan

FEB. 25 2016 (The Conway Bulletin) – Iranian company RAM Plast sold around $6m of pipes to Turkmenistan in a deal linked to the Turkmen government’s drive to link outlying villages to the main gas grid. RAM has previously supplied small capacity polymer pipes to Turkmenistan. The deal highlights Turkmenistan-Iran trade relations.

ENDS

(News report from Issue No. 270, published on March 4 2016)

BP cuts stuff number in Azerbaijan

FEB. 29 2016 (The Conway Bulletin) – British oil company BP laid off 8.5% of its staff in Azerbaijan in 2015, according to a report. The company said it employed 2,992 workers at the end of 2014. In 2015, this number shrunk by 257 people. BP has been hit by the fall in oil prices and is looking to reduce the cost of its operations overseas. Azerbaijan is one of its biggest areas of operations.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Afghan security advisor meets Turkmen officials

MARCH 2 2016 (The Conway Bulletin) – Hanif Atmar, an Afghan National Security Adviser, met officials in Turkmenistan to discuss security around the TAPI pipeline, media reported, a pipeline that Turkmen President Kurbanguly Berdymukhamedov hopes will pump gas to India, across Afghanistan, by 2019. The main focus of the talks was the growing strength of Taliban militants in the region.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Kazakh KMG EP revenues collapse by 37% in 2015

ALMATY, FEB. 26 2016, (The Conway Bulletin) — KMG EP posted a 37% fall in revenues in 2015 to 530b tenge ($2.4m), its lowest since 2009, because of depressed oil prices.

KMG EP is the exploration and production branch of Kazakhstan’s state-owned energy company Kazmunaigas. The collapse in KMG EP’s revenues mirrors the rest of Kazakhstan’s oil and gas sector.

But, although it posted a drop in revenue, KMG EP also boasted a 400% rise in net profit to $1.1b.

This was linked to the depreciation of the Kazakh tenge. KMG EP’s income is mainly in US dollars and its costs are in tenge.

Lower taxes and the write-down of its Ozenmunaigas field in western Kazakhstan also helped KMG EP’s profit. Ozenmunaigas had become a drain on the company, pulling in investment and extra salaries after rioting by workers in 2011.

But it was the depreciation of the tenge that drove most of KMG EP’s profit. KMG EP “recognised a foreign exchange gain of 449b tenge ($2b), as over 93% of cash and financial assets were denominated in foreign currencies at the time of the currency devaluation,” the company said in its annual report.

This boost, though, essentially disguised what would have been a loss in 2015, as analysts pointed out.

“The FX gain is a one off profit and will not affect the future operating profit of the company,” Gulmariya Zhapakova, analyst at Halyk Finance, said in a report.

KMG EP’s yearly report also said that salary inflation would hit it in 2016. It is under pressure from workers and their unions to raise salaries after the tenge lost half its value over the past year.

Production in 2015 was flat. KMG EP and its subsidiaries extracted 12.4m tonnes of oil.

ENDS

(News report from Issue No. 270, published on March 4 2016)

FDI drops in Kazakhstan

MARCH 2 2016 (The Conway Bulletin) – Foreign direct investment (FDI) in Kazakhstan’s oil and gas sector dropped by 72% to $1.9b last year compared to 2014, data from the Central Bank showed. The data shows just how heavily Kazakhstan’s oil and gas sector has been hit by the economic downturn. Proportionally, FDI to Kazakhstan’s oil and gas sector was harder hit than any other part of its economy.

ENDS

(News report from Issue No. 270, published on March 4 2016)

BP and Topaz make Azerbaijan deal

MARCH 3 2016 (The Conway Bulletin) – Dubai-based oil service company Topaz Marine signed a deal with BP to supply 14 offshore vessels for its operations in Azerbaijan. The companies did not disclose the value of the deal, but Reuters calculated it to be worth around $541m.

ENDS

(News report from Issue No. 270, published on March 4 2016)